In a general sense, the concept of managing finances includes performing, recording, reporting, and analyzing financial transactions. The financial transactions may include both monetary or non-monetary based transactions. For example, the financial transactions may include exchanging money for a service, collecting raw goods, transforming the raw goods into a product, selling the product, billing for the product, exchanging goods and/or services between entities, paying interest and principle on a loan, owning assets, paying a salary, and/or other transactions.
Historically, financial management has been performed by individuals and/or financial consultants using journals, checkbooks, ledgers, as well as a myriad of other paper-based tools. The advent of computers and the use of computer software for financial management has led to greater efficiency and understanding of the financial data resulting from financial transactions. For example, an experienced, knowledgeable user of spreadsheet software may program the spreadsheet to perform a variety of statistical operations on the financial data and generate graphs and reports to optimize future financial transactions.
Financial products (e.g., software applications and/or services) improve the efficiency in managing finances. Specifically, financial products provide tools to efficiently perform financial transactions and calculate and analyze the financial data. Businesses, both large and small, rely on financial products to manage the finances of the business by managing the various financial transactions and accounts of the business.
Often, small businesses purchase financial products with differing levels of financial management functionality. For example, a small business without many financial resources may evaluate different financial products, each providing a wide array of features and modules (some of which are deemed essential and others a luxury). Initially, the small business may select a financial product that provides basic functionality and/or performs one essential task (i.e., invoicing or payroll). After the business and financial resources grow, the business is no longer satisfied with the basic functionality provided by the financial product. Thus, the business upgrades to an integrated financial product that provides additional functionality (such as features and/or modules once deemed a luxury).